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Securities Market in Cambodia 1 Mr. Polen SO, Director of Securities Market Supervision Department SEC Cambodia Contents 2 Regulatory Framework Market Infrastructure 1. 2. • • • • • • 3. 4. Securities and Exchange Commission of Cambodia Primary/ Secondary Market Players Securities Intermediaries IPO process Requirement to trade Trading Mechanism Listed Companies Challenges and Opportunities source: article IV, IMF 1. Regulatory Framework 4 2001 • Vision and Financial Sector Development Plan for 2001-2010 • Financial Sector Development Strategy for 2006-2015: updated FSDP 2001-2010 (Currently 2013, Financial Sector Blueprint 2011-2020) 2006 • January 10: Law on Government Securities 2007 • October 19: Law on the Issuance and Trading of Non-Government Securities 200 8 • July 23: Sub-decree on the Conduct and Organization of the Securities and Exchange Commission of Cambodia • April 08: Sub-decree on Implementation of Law on Issuance and Trading of Non-Government Securities 2009 • And subsequently, other Prakas as shown at www.secc.gov.kh 2. Market Structure 5 (SECC) Trading Result -Matching Buying/ Selling Order -Buy/Sell Order CSD: Central Securities Depository Market Operator Trading transaction results CSO: Clearing & Settlement Operator Trading Result Cambodia Securities Exchange (CSX) Buy or Sell Order Securities Firm Investors Buy or Sell Order Transaction CSAs: Cash Settlement Agents Securities and Exchange Commission of Cambodia (SECC) 6 What’s the SECC? SECC is the regulator in the securities industry in Cambodia in the purpose of contribution to socioeconomic development through capital mobilization from public/ securities investors to meet the demand of financing for investors. Established on July 2008 Official Inaugurated on 29 April 2009 Securities and Exchange Commission of Cambodia (Cont.) 7 SECC Board member Minister of Economy and Finance: Chairman Ministry of Economy and Finance Member National Bank of Cambodia Member Ministry of Commerce Member Ministry of Justice Member Council of Minister Member Director General of SECC Member 2 Securities Experts Member 1. Securities and Exchange Commission of Cambodia (Cont.) 8 SECC Structure SECC Internal Audit Unit Director General Deputy Director General Dep. Administration and Finance Dep. Securities Issuance Deputy Director General Dep. Intermediary Supervision Dep. Legal Affair Deputy Director General Dep. Securities Market Supervision Dep. Research, Training, Securities Market Development and IRs Primary and Secondary Market Players 9 Securities and Exchange Commission of Cambodia (SECC) Key Players Primary Market Issuers Securities Underwriters IPO team Secondary Market Other Players Securities Registrar Agent Securities Market Securities Transfer Operator (CSX) Agent Securities Clearing and Securities Paying Settlement Operator Agent Securities Depository Professional Operator Accounting firms and Cash Settlement Agent External Auditors Securities Valuation Companies Dealer/Broker Law Firms Investors Securities Intermediaries 10 7 Securities Underwriters • • • • • • • Tong Yang Securities (Cambodia) Plc. OSK Indochina Securities Limited Cana Securities Ltd. Campu Securities Plc. Cambodia-Vietnam Securities Plc. SBI Royal Securities Plc. Phnom Penh Securities Plc. 1 Securities Dealers • Golden Fortune (Cambodia) Securities Plc. 3 Securities Brokers • ACLEDA Securities Plc. • Sonatra Securities Plc. • CAB Securities Limited. 2 Investment Advisors • Angkor Capital Advisors Co.,Ltd. • F.U.G.I. Gold Co., Ltd IPO Process 11 1. Preparation 1.1. submit intent letter to SECC 1.2. Appoint an unterwriter 1.3. Create an IPO team 1.4. Due diligence 2. Listing Eligibility Review 2.1. Submit listing eligibility review application to CSX 2.2. Approval for listing eligibility review 3. Initial Public Offering 4. Official Listing on CSX 3.1. Submit application 4.1. Submit application for IPO to SECC form on official 3.2. Pricing via Book listing to CSX Building Process 2.2. Approval for 3.3. Apply for confirofficial listing mation on price from CSX 3.4. Submit application for approval on term of offering 3.5. Subscription 3.6. Report result to SECC Requirement: To start trading 12 1. Choose a Securities Firm - Choose a securities firm which is member of the CSX 2. Open a Trading Account -Open a trading account (a cash account and a securities account) at your preferred securities firm with the attached documents (incl. ID (local), Passport (foreigner), bank account number, Investor ID (Requested from the SECC) 3. Place Orders Information needed: 1. Issue name; 2. Quantity; 3. Price; 4. Classification for bid or offer Order can be done by: Written document, phone, email or Market Mechanism 13 Trading Hours & Trading Days : Trading days: From Monday to Friday, except public holidays Trading hours: From 8:00 am to 11:30 am From 08 February 2013, the Trading Execution is amended to 06 (six) times per day- at 9:00 am, 9:30 am, 10:00 am, 10:30 am, 11:00 am and 11:30 am. Receiving Order 8 : 00 AM (Market Open Hour) Receiving Order 9 : 00 AM (Execution) 9 : 30 AM (Execution) Receiving Order Receiving Order 10 : 00 AM (Execution) 10 : 30 AM (Execution) Receiving Order Receiving Order 11 : 00 AM (Execution) 11 : 30 AM (execution) Market Mechanism 14 Base Price • Base Price is the closing price of the previous trading day; except when there’re stock dividend, capital increase, stock split and reverse. Daily Price Change Limit : ± 5% of the base price Principle of Auction : executed through single-price auction, based on the priority of price and time of the submitted orders. • • The lower offers shall have priority over higher offers, and higher bids shall have priority over lower bids. In case of the same price orders, the orders received earlier shall have priority over the orders received later. 2 Listed Companies: 1st since April 2012 15 Company Name: Phnom Penh Water Supply Authority Industry Classification: [006101] Water Utilities Type of Listed Shares: Common Shares No. of Listed Shares: 86,973,162 Code: KH1000010004 Symbol: PWSA (រទសភ) Listed Date: 18 April 2012 Website: www.ppwsa.com.kh 2 Listed Companies: 2nd on 16 June 2014 16 Company Name: Grand Twins International (Cambodia) Plc Industry Classification: Garment Manufacturing Type of Listed Shares: Common Shares No. of Listed Shares: 40,000,000 Code: KH1000020003 Symbol: GTI Listed Date: 16 June 2014 Website: www.grandtwins.com.kh Market trading activities of PWSA share 17 20,000 Volume (Right hand scale) Price (Left hand scale) 800,000 15,000 600,000 10,000 400,000 5,000 200,000 0 0 IPO Price 17/06/2014 20/06/2014 24/06/2014 26/06/2014 30/06/2014 2/7/2014 4/7/2014 8/7/2014 10/7/2014 15/07/2014 17/07/2014 21/07/2014 23/07/2014 25/07/2014 29/07/2014 31/07/2014 4/8/2014 6/8/2014 8/8/2014 12/8/2014 14/08/2014 18/08/2014 20/08/2014 22/08/2014 26/08/2014 28/08/2014 1/9/2014 3/9/2014 5/9/2014 9/9/2014 11/9/2014 15/09/2014 17/09/2014 19/09/2014 8/10/2014 10/10/2014 14/10/2014 17/10/2014 21/10/2014 24/10/2014 28/10/2014 31/10/2014 Market trading activities of GTI share 18 Volume (Right hand scale) Price (Left hand scale) 12,000 250,000 10,000 200,000 8,000 150,000 6,000 100,000 4,000 2,000 50,000 0 0 4. Challenges and Opportunities 19 More supportive regulations Accounting standard and good corporate governance for listed and non-listed company Promote more IPO, SMEs, and mechanisms to promote the market liquidity Investor and other market participant education 20 Securities and Exchange Commission of Cambodia: www.secc.gov.kh Cambodia Securities Exchange: www.csx.com.kh